In a significant crackdown on illicit peer-to-peer cryptocurrency trading, the UK's Financial Conduct Authority (FCA), in collaboration with HM Revenue & Customs and the South West Regional Organised Crime Unit, has raided eight locations in London. The operation, which marks the FCA's first coordinated effort to combat unlicensed P2P trading, has led to the issuance of cease-and-desist orders and the collection of evidence for ongoing criminal investigations.
The targeted sites were allegedly facilitating direct cryptocurrency transactions between individuals without adhering to mandatory registration requirements or implementing anti-money laundering controls, thereby posing a risk of financial crime. Under UK law, crypto exchange providers must register with the FCA, yet currently, no P2P crypto traders or platforms are registered. According to Steve Smart, the FCA's Executive Director of Enforcement and Market Oversight, unregistered P2P crypto traders operating in the UK are acting illegally and pose a significant financial crime risk. Law enforcement views this operation as a crucial step in disrupting the flow of illicit funds, with unregistered traders potentially enabling criminals to launder money.
This enforcement action follows previous efforts by the FCA to prosecute operators of illegal crypto ATMs and collaborate with police to apprehend individuals linked to unregistered crypto exchanges. The crackdown precedes the implementation of a comprehensive regulatory framework for crypto in the UK, set to be introduced by October 2027, with a licensing window scheduled to open in September 2026. The FCA advises consumers to verify the registration status of firms using its online register and warns that dealing with unregistered P2P traders may result in limited access to compensation schemes and the Financial Ombudsman Service, as well as potential risks associated with transactions involving stolen funds.